Missouri Biodiesel Laws and Incentives

State Incentives

Alternative Fueling Infrastructure Tax Credit

An income tax credit is available for the costs of constructing a qualified alternative fuel vehicle fueling station. The tax credit may not exceed the lesser of $20,000 or 20% of the costs directly associated with the purchase and installation of any alternative fuel storage and dispensing equipment. The total amount of tax credits claimed may not exceed $3,000,000 for taxable year 2009, $2,000,000 for taxable year 2010, and $1,000,000 for taxable year 2011. Tax credits may be carried forward for two years and maybe transferred or sold, but will be forfeited if a tax credit recipient stops selling alternative fuel. Eligible fuels include those containing at least 70% of the following alternative fuels: ethanol, compressed natural gas, liquefied natural gas, liquefied petroleum gas, any mixture of biodiesel and diesel fuel, and hydrogen. (Reference Missouri Revised Statutes 135.710)

Biodiesel Production Incentive

The Missouri Qualified Biodiesel Producer Incentive Fund (Fund) provides a monthly grant to qualified Missouri biodiesel producers, provided that 1) at least 51% of the production facility is owned by agricultural producers who are residents of the state and who are actively engaged in agricultural production for commercial purposes or 2) at least 80% of the feedstock used by the facility originates in-state. All of the feedstock must originate in the U.S. However, the feedstock requirement may be waived on a month-to-month basis if the facility provides verification that adequate feedstock is not available. In addition, producers must have registered with the Missouri Department of Agriculture by September 1, 2007, begun construction of the facility before November 1, 2007, and must have begun production before March 1, 2009. The value of the grant is $0.30 per gallon for the first 15 million gallons produced in a fiscal year and $0.10 per gallon for the next 15 million gallons produced in a fiscal year, up to a total of 30 million gallons and for a maximum of 60 months per producer.

The Fund is administered by the Missouri Department of Agriculture. Biodiesel is defined according to ASTM standard D-6751 or its subsequent standard specifications for biodiesel fuel (B100) blend stock for distillate fuels. This incentive expires December 31, 2009, but Missouri-based qualified biodiesel producers that receive grants prior to December 31, 2009, will continue to be eligible for up to total of 60 months. Additional conditions may apply.

(Reference Missouri Revised Statutes 142.031)

Biodiesel Fuel Use Incentive

Through the 2011-12 school year, school districts are allowed to establish contracts with nonprofit, farmer-owned, new generation cooperatives to purchase biodiesel blends of 20% (B20) or higher for use in operating buses. Every school district that contracts with an eligible new generation cooperative for biodiesel will receive an additional payment through its state transportation aid payment if there is an incremental cost to purchase the biodiesel. (Reference Missouri Revised Statutes 414.433)

Fleet Biodiesel Fuel Use Incentive

The Biodiesel Fuel Revolving Fund uses the money generated by the sale of Energy Policy Act (EPAct) credits to cover the incremental cost of purchasing fuel containing B20 or higher biodiesel blends for use by state fleet vehicles. (Reference Missouri Revised Statutes 414.407)

State Laws and Regulations

Alternative Fuel Vehicle (AFV) Acquisition and Alternative Fuel Use Requirements

At least 50% of all new vehicles purchased by a state agency that operates a vehicle fleet consisting of 15 vehicles or more must be capable of operating using an alternative fuel. Excess acquisitions of AFVs may be credited towards future biennial goals. If a state agency fails to meet a biennial acquisition goal, purchases of any non-AFVs are not permitted until the goals are met or an exemption or goal reduction has been granted. In addition, 30% of the fuel purchased annually for use in operating state fleet vehicles must be alternative fuels. (Reference Missouri Revised Statutes 414.400 and 414.410)

Alternative Fuels Promotion

The Missouri Alternative Fuels Commission promotes the continued production and use of alternative and renewable transportation fuels in Missouri. The commission submits a report annually to the Governor and general assembly and provides recommendations on changes to state law to facilitate the sale and distribution of alternative fuels and alternative fuel vehicles; promote the development, sale, distribution, and consumption of alternative fuels; promote the development and use of alternative fuel vehicles and technology that will enhance the use of alternative and renewable transportation fuels; educate consumers about alternative fuels; and develop a long-range plan for the state to reduce consumption of petroleum fuels. (Reference Missouri Revised Statutes 414.420)

Biodiesel Use Requirement

The Missouri Department of Transportation (MoDOT) is required to develop a program that increases the use biodiesel blends in its vehicle fleet. At least 75% of the MoDOT vehicle fleet and heavy equipment that uses diesel fuel must be fueled with B20 or higher biodiesel blends, if such fuel is commercially available. The blended biodiesel fuel will be considered commercially available if the incremental cost of purchasing the fuel is not more than $0.25 as compared to conventional diesel fuel. To the maximum extent practicable, MoDOT must obtain funding for the incremental cost of the blended biodiesel fuel from the state's Biodiesel Fuel Revolving Fund. (Reference Missouri Revised Statutes 414.365)

Alternative Fuel Tax

The $0.17 per gallon motor fuel tax does not apply to passenger vehicles, certain buses, or commercial vehicles that are powered by an alternative fuel. The owners or operators of such vehicles are required to pay an annual alternative fuel decal fee as follows (certain restrictions apply):

It is unlawful for any person to operate a motor vehicle on state highways without a valid decal if such vehicle is required to have an alternative fuel decal. No person may fuel an alternative fuel vehicle with liquefied petroleum gas (LPG) or natural gas unless the vehicle has a valid decal. Motor vehicles licensed as historic vehicles that are powered by alternative fuels are exempt from the motor fuels tax as well as the alternative fuel decal requirement.

(Reference Missouri Revised Statutes 142.803 and 142.869)